Correlation Between Sligro Food and LB Foster
Can any of the company-specific risk be diversified away by investing in both Sligro Food and LB Foster at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sligro Food and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and LB Foster, you can compare the effects of market volatilities on Sligro Food and LB Foster and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sligro Food with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and LB Foster.
Diversification Opportunities for Sligro Food and LB Foster
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sligro and FSTR is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Sligro Food is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sligro Food Group are associated (or correlated) with LB Foster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Foster has no effect on the direction of Sligro Food i.e., Sligro Food and LB Foster go up and down completely randomly.
Pair Corralation between Sligro Food and LB Foster
Assuming the 90 days horizon Sligro Food Group is expected to under-perform the LB Foster. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 2.08 times less risky than LB Foster. The pink sheet trades about -0.06 of its potential returns per unit of risk. The LB Foster is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 925.00 in LB Foster on September 2, 2024 and sell it today you would earn a total of 1,948 from holding LB Foster or generate 210.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.5% |
| Values | Daily Returns |
Sligro Food Group vs. LB Foster
Performance |
| Timeline |
| Sligro Food Group |
| LB Foster |
Sligro Food and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and LB Foster
The main advantage of trading using opposite Sligro Food and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, LB Foster can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in LB Foster will offset losses from the drop in LB Foster's long position.| Sligro Food vs. Legacy Education | Sligro Food vs. Apple Inc | Sligro Food vs. NVIDIA | Sligro Food vs. Microsoft |
| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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